As I've stated in the past on numerous postings, using your debit card can cost you in overdraft charges, particularly when you pay at the pump.Here's why: The minute you swipe your debit card, the merchant authorizes a hold on your account for a certain amount of money. Mastercard and Visa have typically allowed gas stations to hold as much as $100, even if you bought only a couple dollars' worth of gas.
Merchants say holds help ensure a customer's account has sufficient money for the purchase, but consumers and consumer advocates don't like it.
But there's a new development. According to Consumer Report's October issue, Visa will soon institute a new policy regarding these holds. Starting next month, it will offer gas stations a real-time clearing process, so instead of lasting the three business days currently permitted, a debit hold should last less than two hours. I stress the word "should". Expect 24 hours.
Mastercard will require banks to release debit holds for gas purchases within 24 hours or the next business day (more realistic) but that program doesn't start until next summer. Until these changes are in place, (according to the experts at Consumer Reports), here's what you need to do:
- Track debit holds online so you know how much of your account is tied up.
- Ask your gas station if and when it's switching to real-time clearing.
And then there's my favorite, the easy one:
- Avoid holds altogether by paying inside with your debit card using your PIN. They can't put a hold on a PIN transaction because it's processed in real-time.
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